Avatar director James Cameron to film three sequels in New Zealand after production subsidies deal

Director James Cameron will film three sequels to his record-breaking epic Avatar in New Zealand after striking a deal with the government for increased production subsidies, he has announced.

The movies, with a combined budget of at least $US415 million ($463 million), would be shot back-to-back and released from late 2016, Cameron said.

The director, who is about to become a New Zealand resident, says he is delighted with the deal.

New Zealand offered highly skilled production crews and world-class special effects, he says.

"I've worked with crews all over the world, quite a bit in the US and Canada, and you don't have that same spark," he said.

"It's important for everyone to know this isn't just about the Avatar films directly; it's about trying to lift up the New Zealand film industry, incubate new talent and develop new IP."

New Zealand prime minister John Key announced the government had signed a memorandum of understanding to secure the multi-film deal, tweeting:

Fantastic news for our screen sector - the next 3 Avatar films will be made in NZ, which means at least $1/2b will be spent in NZ #nzfilm

- NZ prime minister John Key @johnkeypm

The agreement includes commitments from 20th Century Fox on spending on production in New Zealand, as well as crew quotas and a commitment for New Zealand to host the premiere for one of the three sequels.

The New Zealand film industry had been calling for more support in the wake of the successful Lord of the Rings and Hobbit franchises by director Peter Jackson.

New production incentives in New Zealand give rebates of 15 per cent to 20 per cent, with an extra 5 per cent rebate if filmmakers provide benefits to the country.

Cameron says he expects to work with Jackson and his Weta workshop to avoid stretching the resources available in New Zealand.

The original Avatar, released in 2009, remains the highest-grossing movie of all time, earning $US2.78 billion ($3.1 billion) worldwide.

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